The US is unlikely to be hit by an economic downturn despite sky-high inflation, US Treasury Secretary Janet Yellen said.

There is nothing that points to a recession, she said in an interview at The New York Times Economic Forum.

The U.S. economy has recovered from the damage caused by Covid-19, but the highest inflation in 40 years and supply chain strains exacerbated by the war in Ukraine are fueling pessimism.

The US Department of Labor is set to release its Consumer Price Index (CPI) report for May on Friday, and analysts expect the data to potentially show a modest 8.3% year-on-year slowdown.

The Federal Reserve has begun raising interest rates aggressively and another big hike is expected next week as politicians try to fight inflationary pressures without triggering a recession, AFP reports.

Yellen expressed confidence that they would succeed.